Loan Q&A

All loans require repayment on the part of the borrower. They are not “free money” like grants and scholarships but must be paid back.

Please note that Hofstra University is required to submit loan information to the National Student Loan Data System (NSLDS), and that information is accessible by guaranty agencies, lenders and institutions determined to be authorized users of the data system.

By filing the FAFSA, you will receive an award package which lists your federal Stafford Subsidized/Unsubsidized student loan eligibility and Federal Perkins loan if you are eligible for it.

Student Loan Comparison Chart

Loan Program

Eligibility

Award Amounts

Interest Rates/Fees

Lender/Length of Repayment

Federal Perkins Loans (Discontinued as of Oct. 1, 2017)

Undergraduate and graduate students

Undergraduate—up to $5,500 a year (maximum of $27,500 as an undergraduate) dependent on grade level

Graduate—up to $8,000 a year (maximum of $60,000, including undergraduate loans)

Amount actually received depends on financial need, amount of other aid, availability of funds at school.

5% Fixed interest rate; no fee

Lender is your school

Repay your school or its agent

Up to 10 years to repay, depending on amount owed

Direct Stafford Loans (subsidized and unsubsidized)

Undergraduate and graduate students (graduate students qualify for unsubsidized Stafford Loans only) ; must be enrolled at least half-time (6cr per term undergraduates and Law School; 4.5 cr per term graduate students)

Depends on grade level in school and dependency status Financial need is required for subsidized loans Financial need is not necessary for unsubsidized loans

Fixed rate of 5.05% for both subsidized and unsubsidized loans for undergraduate students for loans first disbursed after July 1, 2018 and before June 30, 2019; 1.066% origination fee for loans first disbursed after October 1, 2017 and before September 30, 2018; Fixed rate of 6.60% for unsubsidized loans for graduate students for loans first disbursed after July 1, 2018 and before June 30, 2019; 1.066% origination fee for loans first disbursed after October 1, 2017 and before September 30, 2018. The federal government pays interest on subsidized loans during in-school and certain other periods. The borrower responsible for all interest on unsubsidized loans.

Lender is the U.S. Department of Education; repay Department Between 10 and 25 years to repay, depending on amount owed and type of repayment plan selected

Graduate or professional degree students enrolled at least half-time (6cr per term undergraduates and Law School; 4.5 cr per term graduate students)

Borrower must not have negative credit history

Student's Cost of Attendance*

- Other aid student receives

= Maximum loan amount

Fixed rate at 7.60% for loans first disbursed after July 1, 2018 and before June 30, 2019; borrower responsible for all interest; 4.264% origination fee for loans first disbursed after October 1, 2017 and before September 30, 2018.

Lender is the U.S. Department of Education; repay Department Parents now have the choice of making payments while the student is in school or deferring payments until the student graduates. Generally, repayment is between 10 to 25 years, depending on the repayment plan chosen.

FSA, you will receive an award package which lists your federal Stafford Subsidized/Unsubsidized student loan eligibility and Federal Perkins loan if you are eligible for it.

First time Stafford Subsidized/Unsubsidized and Parent PLUS and Graduate PLUS loan borrowers must complete a Master Promissory Note (MPN) online at www.studentloans.gov. The MPN is valid for 10 years so once you file that promissory note, you will not need to complete another MPN unless time exceeds 10 years.

Borrowers of the Parent PLUS or Graduate PLUS Loan must also complete the “Request PLUS Loan” process at www.studentloans.gov for each loan every year. PLUS applicants experiencing credit issues may apply with an endorser (similar to a co-signer).

First time borrowers of Stafford and Unsubsidized Stafford Loans must also complete the "Entrance Counseling" at www.studentloans.gov. First time borrowers of the Graduate PLUS Loan must also complete the "Entrance Counseling" at www.studentloans.gov.

Continuing borrowers of federal loans must simply file the FAFSA and accept or decline the loans online through the Hofstra Portal (with the exception of the Parent PLUS and Graduate PLUS Loan which you must complete the “Request PLUS Loan” process at www.studentloans.gov every year).

For step-by-step assistance with www.studentloans.gov, call the Direct Loan Servicing Center at 1-800-557-7394

Stafford and PLUS loans are a common source of funding for your education. These loans are part of the William D. Ford Federal Direct Loan Program where the U.S. Department of Education is the lender. Servicing of these loans is provided by one of several agencies. The Department of Education selects the servicing agency on behalf of a Direct Loan borrower.

How do I find out who is servicing my direct loans? The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for federal student aid. Borrowers may log into the NSLDS website at www.nslds.ed.gov to determine which agency is servicing their loans. To access the site, a borrower must provide his/her FSA ID.

Who is your servicer and why do you need to know? It's important to know who services your loan because they will be your primary contact throughout repayment. Your servicer will:

Loans usually disburse to your account on or about 10 days prior to the start of each term. Please note: disbursement may not occur if you have not completed all the requirements and/or submitted all the required documentation.

Students have the right to cancel all or part of the loan or disbursement prior to or after the funds have been disbursed to the university. Prior to the disbursement of the loan students should contact the Hofstra Student Financial Services Suite and request that the loan be canceled or reduced. After the loan has been disbursed to the university, students need to contact the Office of Student Financial Services and request that all or a portion of the loan funds be returned to their lender. You can contact the Office of Student Financial Services via E-mail or visit them in person in Memorial Hall on the second floor.

Stafford loans and/or PLUS=The last day of enrollment of the academic period. Alternative loans vary by lender but can usually be applied for up to a year after the last day of the period the student was enrolled.

Hofstra University does not prefer, recommend, promote, endorse, or suggest any lender. You are not required to borrow from any of the lender that appears on the list and there is no penalty for selecting a different lender, if you prefer.

For Undergraduate students, the awarding of subsidized or unsubsidized Direct loans is determined by the FAFSA. You must demonstrate financial need for the subsidized loan. Beginning July 1, 2018, the interest rate for both is fixed at 5.05%. The subsidized loan interest is paid by the government while you are in school. The unsubsidized loan interest is capitalized if you do not pay it while you are going to school. You can indicate on the MPN if you do or do not want to pay the unsubsidized interest while you are in school.

Federal regulations require a counseling session which informs you of your rights and responsibilities in borrowing the loan. First time borrowers of the Stafford loan must complete the entrance counseling at www.studentloans.gov . First time borrowers of the Graduate PLUS loan must complete the entrance counseling at www.studentloans.gov.

Federal regulations require that student loan borrowers must complete a counseling session within 30 days of leaving school or dropping below half-time status (below 6credits* undergraduate or Law School, below 4.5credits* graduate.) It is information that informs you of your rights and responsibilities in repaying the loan. To complete an Exit Interview, visit www.hofstra.edu/FAExit .

Stafford and Graduate PLUS loan payments begin after your 6 month grace period of leaving school or dropping below half-time status (below 6 credits undergraduate or Law School, below 4.5 credits other graduate.). Parent PLUS loan payments begin within 60 days of full disbursement of the loan unless deferment arrangements are made (call 1-800-848-0979 to make arrangements for deferment). For federal Perkins Loans the grace period is nine months. However, if you're attending less than half-time, check with your Student Financial Services counselor to determine your grace period. During the grace period, you don't have to pay any principal, and you won't be charged interest.

Alternative student loan repayment on the principal and interest usually begins after the student is out of school but some require interest payments while in school; contact the lender for more specific information.

Yes. Repayment plans offered for Direct Stafford Loans are generally the same as those offered for FFEL Stafford Loans. However, the Direct Loan program offers an Income-Contingent Repayment plan and the FFEL program offers an Income-Sensitive Repayment plan. The repayment periods for Stafford Loans vary from 10 to 25 years. When it comes time to repay, you can pick a repayment plan that's best-suited to your financial situation. The following repayment plans will be available to Direct and FFEL Stafford Loan borrowers:

A Standard Repayment Plan with a fixed annual repayment amount paid over a fixed period of time not to exceed 10 years.

A Graduated Repayment Plan paid over a fixed period of time not to exceed 10 years. With this plan, your payments start with a relatively low amount and then increase, generally every two years.

An Extended Repayment Plan with a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years. If you're a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans. If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. This means, for example, that if you have $35,000 in outstanding FFEL Program loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFEL Program loans, but not for your Direct Loans. Your fixed monthly payment is lower than it would be under the Standard Plan, but you'll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.

Income-Contingent Repayment (ICR) Plan (Direct Loans): Your monthly payments will be based on your annual income (and that of your spouse, if married), your family size, and the total amount of your Direct Loans. Borrowers have 25 years to repay under this plan, the unpaid portion will be forgiven. However, you may have to pay income tax on the amount that is forgiven. As of July 1, 2009, graduate and professional student PLUS borrowers in the Direct Loan program are eligible to use the ICR plan. Direct Loan parent PLUS borrowers are not eligible for the ICR repayment plan. Visit www.dl.ed.gov for more information for Direct Loan Income Contingent Repayment Plans.

Income-Sensitive Repayment Plan (FFEL Loans): With an income-sensitive plan, your monthly loan payment is based on your annual income. As your income increases or decreases, so do your payments. The maximum repayment period is 10 years. Ask your lender* for more information on FFEL Income-Sensitive Repayment Plans.

Income-Based Repayment (IBR): This new repayment option (the income-sensitive repayment plan in the FFEL program and the income-contingent repayment plan in the Direct Loan program will continue to be available to borrowers) is available as of July 1, 2009, to all FFEL and Direct Loan borrowers who have a partial financial hardship, except for FFEL or Direct Loan parent PLUS Loan borrowers or a FFEL or Direct Loan Consolidation Loan borrowers, who repaid parent PLUS loans through the Consolidation Loan. Under this plan, your required monthly payment amount will be based on your income during any period when you have a partial financial hardship. Your monthly payment amount may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you repay under this plan and meet certain other requirements over a specified period of time, you may qualify for cancellation of any outstanding balance on your loans. Contact the Direct Loan Servicing Center (for Direct Loans) or your FFEL lender (for FFEL Program loans) for more information about the Income-Based Repayment Plan.

If you don't choose a repayment plan when you first begin repayment, you'll be placed under the Standard Repayment Plan.

You can change plans to suit your financial circumstances. You'll get more information about repayment choices before you leave school and, later, from the holder of your loan. You can also get more details about repayment plans from our Web site, https://studentaid.ed.gov/sa/repay-loans. The chart below shows typical repayment plans for both programs. This chart also shows estimated monthly payments for various loan amounts under each plan and assumes that the student is making regular monthly payments on any unsubsidized loans and is not capitalizing the interest while in school. If the interest is capitalized,* (added to the outstanding principal balance) the cumulative payments and total interest charges will be higher than shown in the chart.

Payments are calculated using the fixed interest rate of 6.8 percent for student borrowers.

For a FFEL borrower, the requirement is that the borrower (1) must have had no outstanding balance on a FFEL Program loan as of Oct. 7, 1998, or on the date the borrower obtained a FFEL Program loan on or after that date, and (2) must have more than $30,000 in outstanding FFEL Program loans. For a Direct Loan borrower, the requirement is that the borrower (1) must have had no outstanding balance on a Direct Loan Program loan as of Oct. 7, 1998, or on the date the borrower obtained a Direct Loan Program loan on or after that date, and (2) must have more than $30,000 in outstanding Direct Loan Program loans. The amounts were rounded to the nearest dollar and were calculated based on a 25-year repayment plan.

This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on this plan.

Assumes a 5 percent annual growth (Census Bureau) and amounts were calculated using the formula requirements in effect during 2006.

Yes. Tax benefits are available for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to all loans used to pay for postsecondary education costs, including PLUS Loans. The Internal Revenue Service (IRS) Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits. You can get more information online at www.irs.gov or by calling the IRS at 1-800-829-1040. TTY callers can call 1-800-829-4059.

Phased-in Cuts in Interest Rates on Subsidized Stafford Loans for Undergraduate Students